Marshalls: Recovery in construction to ‘build throughout the year’
Housing industry supplier Marshalls has said it expects the construction industry to recover in 2025 after struggling over the past few years.
But the firm still said its outlook remained “cautious” due to “continued market uncertainty” as well as the impact of an increase in costs from higher National Insurance contributions.
Marshalls faces a £3m increase to its wage bill as a result of the higher taxes levelled in October’s Budget, which will hit the labour-intensive construction, retail and hospitality industries hardest.
The Yorkshire-headquartered firm reported an eight per cent drop in revenue during the year ended December 31. Its share price subsequently dropped by eight per cent.
Landscaping revenue was particularly hard-hit, down 17 per cent, reflecting “lower demand from house builders and continued subdued activity in private housing maintenance”.
The rising cost of borrowing has impacted profit margins on many ongoing and upcoming development projects, which has had knock-on effects on Marshall’s markets.
England’s house building pipeline is at the lowest level since records began 17 years ago, with multiple housebuilders reporting fewer completions year-on-year – although they say the outlook is improving.
Marshalls predicted that profitability in 2025 “will be ahead of 2024”, with the rate of growth “subject to the pace of market recovery and the benefits of the near-term actions being realised”.
Chief executive Matt Pullen said: “We are pleased to report a resilient performance and further reduction in net debt. Despite subdued market activity throughout the year, our results underline the strength of our diversified portfolio of businesses.
Looking ahead to 2025, our focus will be on the execution of our new Transform & Grow strategy, capitalising on identified growth opportunities, continuing to drive performance in our core business, and maintaining a disciplined approach to investments and cost management.”